Ginko Financial was an alleged

Ponzi scheme A Ponzi scheme (, ) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are comin ...

on the

social networking A social network is a social structure made up of a set of social actors (such as individuals or organizations), sets of dyadic ties, and other social interactions between actors. The social network perspective provides a set of methods for an ...

video game Video games, also known as computer games, are electronic games that involves interaction with a user interface or input device such as a joystick, controller, keyboard, or motion sensing device to generate visual feedback. This fee ...

Second Life ''Second Life'' is an online multimedia platform that allows people to create an avatar for themselves and then interact with other users and user created content within a multi player online virtual world. Developed and owned by the San Fra ...

. It offered accounts denominated in

Linden Dollars The virtual world ''Second Life'' has its own economy and a virtual token referred to as Linden Dollars (L$). In the SL economy, users (called "residents") buy from and sell to one another directly, using the ''Linden'', which is a closed-loop v ...

, which would be paid extremely high interest rates (at one point 0.145% per day or 69.7% per year"Ginko's Going...Going?"
/ref>), ostensibly funded by undisclosed investments.

The Alphaville Herald ''The Alphaville Herald'' is an online newspaper covering virtual worlds, founded by the American philosopher Peter Ludlow in 2003. History ''The Alphaville Herald'' was established by the American philosopher Peter Ludlow, known by his pseudo ...

"Ginko Financial’s End-Game"
August 6, 2007 Many of the bank's investments were believed to be in in-game casinos. In 2007, after Linden Labs placed restrictions on in-world gambling, there was a

run Run(s) or RUN may refer to: Places * Run (island), one of the Banda Islands in Indonesia * Run (stream), a stream in the Dutch province of North Brabant People * Run (rapper), Joseph Simmons, now known as "Reverend Run", from the hip-hop group ...

on the bank which caused it to collapse. All remaining accounts (by then worth 200 million Linden Dollars) were compulsorily converted into

perpetual bond A perpetual bond, also known colloquially as a perpetual or perp, is a bond with no maturity date, therefore allowing it to be treated as equity, not as debt. Issuers pay coupons on perpetual bonds forever, and they do not have to redeem the prin ...

s. After the collapse,

Linden Labs Linden Research, Inc., doing business as Linden Lab, is an American technology company that is best known as the creator of ''Second Life''. The company's head office is in San Francisco, with additional offices in Boston, Seattle, Virginia an ...

introduced a rule that interest-paying accounts in Second Life could only be offered by organisations with real-life banking licenses.

"New Policy Regarding Inworld Banks"
January 2008

References

{{Second Life Second Life Virtual economies